Case IKEA 1. What are the core competencies and end products of IKEA? How are they linked with each other? The most important core competencies of IKEA is their ability to design furniture and interior products with a strong focus on a nice and appealing design combined with the lowest integral costs. IKEA uses its open warehouse and self-service approach as a USP (unique selling point), while at the same time it reduces space requirements and thus costs. Their unique level of core competencies enables IKEA to use their formula Europe – and even worldwide. IKEA developed the recombination ability via learning by doing. If necessary, IKEA redesigns its products to local habits and demands and is also able to adapt its routines. For example, for the Chinese market, they even offered assembly services, because the labor costs are that low over there. The IKEA concept of form, function and price is unique. Especially their consequent attitude that all their products in all aspect meet their requirements. For example, if it is not possible to fit a design product to pack it efficiently in a box, it has to be redesigned, or canceled. 2. How did IKEA diversify?

IKEA did diversify both product wise as well as expanding globally. The company decided to focus on special target groups, for example children and Young families. IKEA diversified also by introducing a new line of kitchen appliances. Their global difersification was made posiible by Ikea’s strategy of trusting the intuition of its (local) staff (decentralization with the ability to even adapt product to local requirements), combined with their extensive internal training programs. They even gave up on central, internal budgeting. The locals only had to meet a fixed ratio of costs to turnover. A key factor for Ikea’s international success is also the founding of Inter IKEA Systems BV. They introduced a personal interest from the local managements by making them franchisees. Doing this IKEA initiate a strong...

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...1. Look for information in Internet and define current IKEA Supply Chain
IKEA has operated for over 60 years now, with operations all over the globe. The company success is seen in different parts of the company from offering affordable products, sustainable products with great designs and functional organization. With out forgetting their strong supply chain, which is considered to be among the top companies that can manage their global operations effective and efficiently.
Their supply chain has evolved over years; for example in 1950’s they had a few suppliers compared to know making their supply chain more complex. Where the advancement in world technology, has helped their business model. IKEA have now initiated a program aimed at taking better control of its supply chain and enhancing performance in terms of delivery service and costs.
The most crucial part that has been changed over the years by IKEA is introducing new planning concept, which is currently being implemented. Its cornerstones are mutually integrated planning processes, a centralized planning organization; focus on data quality, and use of advanced software support. As a first step in developing the new planning concept, IKEA centralized all forecasting activities and need calculations in order to control stock levels and replenishment throughout the whole supply chain.
The new planning process starts with corporate sales...

...Research Paper
IKEA
By: Rahul Mor.
ID: 12847704
Lecturer: Mr. Frankie Yee.
James Cook University
Singapore
INDEX
1. Abstract--------------------------------------------------------------3
2. Introduction---------------------------------------------------------4
3. Measures of success-----------------------------------------------4
4. Reasons Behind success-------------------------------------------5
5. Leadership inIKEA-----------------------------------------------6
6. Recommendations--------------------------------------------------7
7. References-----------------------------------------------------------8
Abstract.
This research paper studies the Strategies followed and used by international retail giant IKEA, which is well known for its affordable, modern designed furniture products which can utilize for household and offices. Being a largest furniture retailer with 332 stores in 44 countries IKEA will soon open stores in India, Egypt, Indonesia, South Korea, New Zealand, Latvia, Estonia, and Serbia.
The paper focuses on the successes of the company and tries to find out the reasons behind the strategies applied to achieve the successes. And the leadership strategies bean followed to achieve the goal.
Introduction
IKEA founded by Ingvar Kamprad in Sweden, 1943 when he was 17 years old. IKEA grown as international furniture retailer with 332 stores in 44...

...In this case of Ikea, they adopted the cost leadership strategy and product differentiation to their business model.
In order to maintain cost leadership in the market, internal production efficiencies must be greater than that of competitors. Under Ikea's strategy, suppliers are usually located in low-cost nations, with close proximity to raw-materials and reliable access to distribution channels. These suppliers produce highly standardized products intended for the global market, which size provides the firm with the opportunity take the advantage of economies of scale factors. Ikea's role is not only to globally integrate operations and centrally design products, but also to find an effective combination of low cost, standardization, technology, and quality.
Due to large product range Ikea has achieved economies of scale and scope, as waste of resources is a sin at Ikea. It provides a secure delivery system to its supplier this way it has achieved economies of scope. It is simply when a company seeks to produce the same product more efficiently and at a lower cost than its competitors. This can be achieved through economies of scale, innovations in production & distribution, lower raw materials cost. It often a company seeking a cost leadership strategy will aim for a broad market scope in order to satisfy economies of scale.
The Ikea introduced self-service and cash-and-carry concepts. Also, it...

...school of business
Supply chain management of IKEAIKEA
Table of content
Executive summary 2
IKEA supply chain and background 2, 3
Strategy and market 4
Process structure in terms of information, inventory, transportation and location 5
Problems and weaknesses 6
How can they restructure the problem 6, 7
Recommendation 8
Conclusion 8
References 9
Executive summary
IKEA is a multinational corporation with Swedish origin. They retail furniture and some other objects for home and home decoration at a low price, so as many people as possible will be able to afford them and with high...

...upon those who supply them with finished products or components for assembly. IKEA and the shower curtain manufacturer discussed previously are one example. After a manufacturer of some of their carpets was linked to child labor in the mid-1990s, IKEA developed "The IKEA Code of Conduct" for its suppliers, as do many retailers sensitive to public image and the value of their brand names. IKEA was an early and high profile leader in openly addressing issues of social and environmental responsibility in the supply chain. IKEA's motto is "low prices, but not at any price." Clothing and sport goods retail giants such as The GAP and Nike have experienced similar, though more troubled, conversions to high profile implementation of social responsibility programs.
The difficulties that western multinational corporations have in balancing their desire to maximize the financial bottom line, while addressing the social and environmental costs of doing business and wishing to appear and to be socially responsible, are apparent within the business model of IKEA. Publicly and internally, IKEA is dedicated not only to maintaining its low prices, but to continually lowering its prices. Recently IKEA committed itself to implementing this strategy not only in its European and North American stores, but in the world's most ferociously price competitive market, China. In order to gain and hold...

...﻿OVERVIEW OF IKEA
I. HISTORY
Ingvar Kamprad: The founder of IKEA, Ingvar Kamprad, began his business career as a young boy selling matches purchased in bulk individually for a profit to his neighbors near Agunnaryd. As his business grew, he expanded to selling fish, seeds, Christmas decorations and eventually, pencils and ball-point pens which were a new phenomenon in 1935. He was very clever in utilizing his resources - he delivered his goods by bicycle, and later used the local milk delivery vehicle to make deliveries.
IKEA: In 1943, with a gift from his father, Ingvar established his business, using his initials, Ingvar Kamprad, the name of the farm on which he was born, Elmtaryd and the village nearby, Agunnaryd for the acronym. At this time, he was selling everything from pens and wallets to watches and nylon stockings by going door to door and selling directly to his customers. By 1945, the first advertisements for IKEA began showing up in local newspapers and he had developed a rudimentary catalog.
IKEA Store:
The first full IKEA store opened in Älmhult in 1958. With 6700 m2 (72,118 ft2), it was the largest furniture display in all of Scandinavia.
In 1963, the first IKEA store outside Sweden opened near Oslo in Norway, followed by the flagship store in Stockholm - a whopping 45,800 m2 (492,987 ft2) circular store inspired by the Guggenheim Museum in New York...

...Sustainability Strategy
Presented by Sinead Peters http://www.youtube.com/watch?v=AqLQmaIT6-o
History
IKEA was founded in 1943 by Ingvar Kamprad in Sweden. The name IKEA is formed from the founder's initials (I.K.) plus the first letters of Elmtaryd (E) and Agunnaryd (A), the farm and village where he grew up.
2
History
First stores opened Sweden in 1958, Northern Ireland in 2007 Republic of Ireland 2009 IKEA specialises in designing and selling readyto-assemble furniture and are currently the world’s largest retailer with a range of 9.500 products.
3
Sustainability – Approach
Strength
IKEA began to push for sustainability in the early 90s. IWAY – IKEA code of conduct Strong approach and awareness about sustainable business practices. Up to date Sustainability report, recently published from 2011, includes goals until 2015 ‘Never Ending List’ to become more sustainable
4
Sustainability – Approach
Strength cont.
Functional products at low prices. Cost leader in the furniture industry. Combined low cost with good quality helps to attract and retain its customers. Maintain long term partnership with its suppliers. Majority of IKEAs furniture is flat-pack, ready to be assembled by the customer. Strong focus on co-worker retention. IKEA Value their employees.
5
Sustainability – Approach
Weakness
There may be cultural differences in some...

...Sweden early on (50s and 60s)?
In 1943, IKEA was founded by Ingvar Kamprad at his home town, selling mainly pencils, postcards and other merchandise. From late 40s to early 50s, manufacturing furniture was introduced as a complement to general merchandise. This enabled Kamprad to step in the furniture business and exploring situation and finding new opportunities. The business had gain massive success in the domestic market for the since opening and the key to its achievements is Kamprad’s leadership. He not only had the vision for the furniture industry, market’s situation, and enthusiasm for business, but Kamprad also played an important role in managing the company’s resources, turned it into capabilities and prove IKEA’s distinctive core competencies. Example for that can be IKEA’s leap on the furniture retail industry: more affordable products to target the large amount of customer, showroom and store’s concept, better customer experience…
IKEA’s strategy and business model was also the company’s source of success. IKEA’s prioritize the need of customer, in which price and product range rank the first when it comes to satisfy customer demand, following by IKEA store, catalogue… Marketing strategy was also totally different from other market player at that time, with free and comprehensive catalogues, IKEA was able to introduced customer with a new shopping experience. IKEA’s simple objectives were also needed for its growth....